The Supreme Court will decide if cases are stayed during arbitration appeals; companies’ risk assessments should consider this decision.

The Supreme Court granted certiorari in a case that has serious implications for companies that are unsuccessful in enforcing arbitration provisions in federal district courts.

In Coinbase, Inc. v. Bielski, No. 22-105, the defendant moved to compel arbitration in two putative class actions. The motions to compel were denied, and the defendant sought stays while it appealed the denials—which the Federal Arbitration Act gives defendants an automatic right to do. See 9 U.S.C. § 16. Both motions to stay were denied, and the Ninth Circuit affirmed both decisions.

The federal appellate courts are divided over whether litigation should be stayed when a defendant appeals an arbitral denial.

Companies’ risk assessments when enforcing arbitration provisions could be significantly affected by the Court’s decision. When companies are required to proceed in litigation at the district court — while appealing the denial of their motion to compel arbitration in circuits that do not automatically stay proceedings while an appeal of an adverse arbitration ruling is pending — they face increased administrative burdens and increased costs.

SCOTUS Blog link.

The above summary shared by Commercial Litigation and Employment Law attorney Casey Erick via his LinkedIn account.

About the Author: Casey Erick

Casey Erick is a Shareholder and focuses on Commercial Litigation and Employment Law.